The slow­down started around six years ago and the mar­ket is yet to re­cover from the sharp price cor­rec­tions and de­cel­er­a­tion in the sup­ply growth.

The re­alty as­sets lost value by 20% to 50% dur­ing this pe­riod de­pend­ing on the lo­ca­tion, seg­ment and price-bracket. Sup­ply ex­pan­sion took a hit with builders un­able to at­tract the buyer. Though, sup­ply growth de­clined, but with low de­mand lev­els, the un­sold in­ven­tory with builders in­creased.

MAR­KET RE­VIVAL DIS­TANT

Among dif­fer­ent price seg­ments, mid-price and lux­ury seg­ments suf­fered the most in terms of low de­mand and price cor­rec­tions. Price cor­rec­tions were sharpest in the apart­ment seg­ment in com­par­i­son to the plot­ted de­vel­op­ments. Panchkula, Mo­hali and the pe­riph­ery reg­is­tered the sharpest price cor­rec­tions. Cur­rently, the de­mand lev­els re­main low and even though, rate of price cor­rec­tions have sub­stan­tially de­cline in the last eight months, how­ever, the mar­ket re­vival is still some time away.

In the midst of over­all slug­gish mar­ket con­di­tions, there are some ex­cep­tions to the gen­eral trend. In some of th­ese ar­eas price move­ments turned pos­i­tive, while in other sales vol­umes steadily in­creased with sta­ble prices.

LO­CA­TIONS

Chandigarh and some lo­ca­tions in the pe­riph­ery are far­ing rel­a­tively bet­ter than most lo­ca­tions in the tric­ity. “The hous­ing mar- ket in Chandigarh is reg­is­ter­ing an up­swing in de­mand and this is pos­i­tively im­pact­ing the price growth also. Within the city, north­ern sec­tors in­clud­ing sec­tor 7, 8, 9 and 10 are bet­ter po­si­tioned in terms of price and de­mand growth than other sec­tors,” says San­jay Arora, 42, a Chandigarh-based real es­tate con­sul­tant.

The sup­ply-de­mand equa­tion is the main rea­sons for the pos­i­tive price growth in th­ese lo­ca­tions. “The sup­ply is very lim­ited in the city. There is no large scale ad­di­tion to sup­ply. So, even a small in­crease in de­mand start to fuel pos­i­tive price move­ments. This is the case with cur­rent city hous­ing mar­ket. The de­mand re­vived in the last eight months,” says Arora.

In the pe­riph­ery, up­com­ing ar­eas in the vicin­ity of the in­ter­na­tional air­port are at­tract­ing buyer at­ten­tion. “Aero City and IT City in Mo­hali, lo­cated near the air­port and con­nected with the rest of the tric­ity ar­eas through Air­port Road, wit­nessed price ap­pre­ci­a­tion when there were price cor­rec­tions in most of the tric­ity. Favourable de­mand drove the price ap­pre­ci­a­tion. Af­ter de­mon­eti­sa­tion hous­ing prices in th­ese lo­ca­tions are sta­ble,” says San­jiv Sharma, 54, a Chandi­garhbased real es­tate con­sul­tant.

PRICE BRACK­ETS

The af­ford­able and bud­get seg­ments are reg­is­ter­ing larger sale vol­umes than the mid-price and lux­ury seg­ments in the tric­ity. The Na­tional Hous­ing Bank’s Residex also in­di­cates that the smaller-sized and cheaper hous­ing units recorded con­sis­tent price ap­pre­ci­a­tion in the last one year.

Ac­cord­ing to the Residex HPI@Mar­ket Price for un­der- con­struc­tion prop­er­ties, the seg­ment, 646 sq ft sized prop­er­ties, reg­is­tered sharp price ap­pre­ci­a­tion by 31% be­tween June 2015 and March 2016. There­after, for two quar­ters be­tween March and Septem­ber, prices fell by 17%. But, since Septem­ber last year, prices con­sis­tently in­creased. Be­tween Septem­ber and De­cem­ber 2016, prices in the cat­e­gory in­creased by 30%.

IM­PACT OF DE­MON­ETI­SA­TION

The de­mon­eti­sa­tion an­nounce­ment put a break to the sharp price growth in the seg­ment, but still prices in­creased by 3% be­tween De­cem­ber last year and March this year. Since June 2015, the av­er­age price in the seg­ment has in­creased from ₹4,286 per sq ft to ₹7,353 per sq ft by March this year.

“One of the rea­sons for the slow­down hit­ting the re­gion’s re­alty mar­ket was builders mis­cal­cu­lat­ing the de­mand con­cen­tra­tion. Most builders cre­ated sup­ply in the mid-price and lux­ury seg­ments. Th­ese seg­ments lacked ad­e­quate end-user de­mand and were mainly driven by the spec­u­la­tive in­vestor. When the in­vestor with­drew from the mar­ket, the de­mand and price in th­ese seg­ments were sharply hit. Now, some of the builders are cor­rect­ing this strat­egy and fo­cus­ing on the end-user de­mand in the af­ford­able and bud­get hous­ing seg­ments. The in­crease in sup­ply is be­ing matched by the de­mand. The sales vol­umes are pos­i­tive but there is price sta­bil­ity in th­ese seg­ments. The end-user de­mand doesn’t fuel price growth on same lines as does the spec­u­la­tive in­vestor de­mand,” says Sharma. SEG­MENTS Among dif­fer­ent seg­ments, the in­de­pen­dent floor with smaller ticket size, lo­cated in the pe­riph­ery, reg­is­tered a pos­i­tive trend in de­mand and sup­ply. The trend is con­tin­u­ing at present.

Most of th­ese floors avail­able in the pe­riph­ery are priced be­tween ₹20 lakh to ₹40 lakh. The sizes vary from 800 sq ft to 1,800 sq ft. “2-BHK (bed­room, hall, and kitchen) and 3-BHK floors are in most de­mand. The price range is per­fect even for a mid-salaried fam­ily who af­ter avail­ing the loan can eas­ily af­ford th­ese floors. The op­tions have also con­sis­tently in­creased in the seg­ment in the last cou­ple of years. It is a seg­ment dom­i­nated by the end-user and the in­vestor is still to en­ter this seg­ment,” says Singh.